Piltel a 'buy' after strong H1; target price P5.30 - ATR

ATR-Kim Eng Securities reiterated its "buy" call for Pilipino Telephone Corp. (Piltel) after the telecom operator posted strong second quarter earnings and improved sales. "Piltel remains the region's cheapest telco and we expect the stock to appreciate 49 percent to P5.30 in 12 months. This is in addition to an estimated dividend yield that could reach as much as 20 percent by 2008," ATR said in a report dated August 11. Piltel reported a 17 percent rise in its first semester core net income to P3.18 billion from P2.72 billion a year ago. ATR also said the company's new subscribers increased three-fold on the back of a stronger sales performance. "Sales benefited from over 700,000 new subscribers during the period, a three-fold increase from the same period last year. Piltel sales are already equivalent to 50 percent of our full-year forecast," ATR said. The stock brokerage firm said efficiency in operations also contributed to Piltel's strong showing, with the company's subscriber take up rising despite a drop in promotional expenses. "Operating expenses dropped 35 percent in the second quarter thanks to lower subscriber acquisition costs. Selling and promotions expenses plunged 48 percent. Yet Piltel's subscriber take up actually accelerated both quarter-on-quarter and year-on-year," ATR said. - GMANews.TV